Mastodawn

https://sifted.eu/articles/builder-ai-auditor-founder-news

Kevin Beaumont

The builder.ai story is wild. Microsoft put almost half a billion dollars into them (and lost it all). Everything crumbled when the Financial Times did a tiny amount of research on them, and realised their accounts were signed off a friend of the CEO. As soon as they hired a real auditor, they collapsed.

Kevin Beaumont May 24

After hiring a real auditor, the auditor found builder.ai faked three quarters of its sales. https://www.ft.com/content/926f4969-fda7-4e78-b106-4888c8704bda

Microsoft-backed Builder.ai collapsed after finding potentially bogus sales

Failed UK start-up revised down revenues to just a quarter of prior estimates

Financial Times

Kevin Beaumont May 24

A journalist investigating this told me they’re looking at various other AI companies off the back of this - and all share similar close links to their auditors so far.

So strap in, and prepare to be shocked dot GIF.

AI6YR Ben May 24

@GossiTheDog LOL bonus points if they used AI to fudge the books?

Olivier Mehani May 24

@ai6yr @GossiTheDog Oooooh AI accountants. It's not fudging if you are hallucinating the books.

CatSalad🐈🥗 (D.Burch)

May 24

@GossiTheDog Vibe accounting

monotonehell 🏳️‍🌈🇦🇺 (Andrew)May 24

@catsalad @jpm @GossiTheDog that's just regular corporate financial accounting.

Legit_Spaghetti May 24

@GossiTheDog

Dave Rahardja May 24

@GossiTheDog Looking forward to it.

Steve May 24

@GossiTheDog I can’t decide whether a sarcastic shocked pikachu or a Futurama fry shocked shocked, well not really is the better reaction here 😂

Ignazio Palmisano May 24

@lilstevie @GossiTheDog Bender with cigar

Diane May 24

@GossiTheDog

Massive bankruptcies triggering a new AI winter cannot come soon enough.

@GossiTheDog So the techbros that grifted all the crypto stuff then went on to do even more techbro grifting??? What a surprise!

Hugo Mills May 24

@GossiTheDog Captain Renaud shutting down Rick's casino levels of shocked.

Now, where are my winnings?

da_667 May 24

@GossiTheDog I keep waiting for the inevitable collapse of companies that attempt to derive anything useful out of the bullshit machine(s), and I keep remaining hopeful that the bullshit machine(s) will die a horrible death.

Rairii

@GossiTheDog

you'd think MS would have uncovered that when doing due diligence?

mei | 絶望動物 May 20

@Rairii @GossiTheDog ah, no, no, by a law of nature, big corpos don't think straight when AI is involved. it's the corporate equivalent of getting a boner and having all your blood leave the brain to tend to more pressing matters.

USB Type-Steve

@Rairii @GossiTheDog They're all too busy microdosing to do that.

Graham Sutherland / Polynomial May 20

@Rairii @GossiTheDog at this point I honestly believe that they're paying serious professionals to do the due dilliegence, then sweeping the findings under the carpet and proceeding anyway.

Rairii

@gsuberland @GossiTheDog ah yes, the "pentest to show compliance but never actually fix anything" method of performing company acquisions

Graham Sutherland / Polynomial May 20

@Rairii @GossiTheDog yup, except in this case it's a departure from the norm - fiduciary responsibility is something they are intimately familiar with and usually take seriously, because it has actual personal impact, but they seem to be so utterly drunk on the idea that AI investments will net them the infinite hockey stick growth that has eluded them with every other get-rich-quick investment.

@gsuberland @Rairii @GossiTheDog we’ve been seeing this for decades with boards of directors. The role of the BoD is a check on idiocy. But when the CEO is a board member, and develops a cult of personality, the directors become sycophants. And these days, C-levels become directors of other companies, so it becomes a mutual back scratch environment, to put it politely.

shironeko May 20

@zarchasmpgmr @gsuberland @Rairii @GossiTheDog the board is ultimately selected by the shareholders, it would be interesting to study if having a dysfunctional board have any impact on the share price.

@shironeko @gsuberland @GossiTheDog @zarchasmpgmr @Rairii

Jeff Grigg May 20

*In Theory*, the shareholders elect the board of directors, who hire the CEO, and who manage and direct the CEO, and kick them out and replace them, if needed.

*In Practice*, the CEO invites their friends to be directors, and they do likewise, so they're all directors and CEOs to each other, and the shareholders just "rubber stamp" the whole thing, as what else are they going to do?

@JeffGrigg @shironeko @gsuberland @GossiTheDog @Rairii *exactly.gif*

shironeko May 20

@JeffGrigg @gsuberland @GossiTheDog @zarchasmpgmr @Rairii Occasionally activists investor do come in and fire the whole board, and at the minimum they can choose not be a shareholder. Which is why I say if it would be interesting if this have any measurable effect on the share price.

@shironeko @gsuberland @GossiTheDog @Rairii @JeffGrigg I hope some Ph.D. in a business school has studied this. But with dissertations locked behind firewalls…

Raven667 May 21

@JeffGrigg @shironeko @gsuberland @GossiTheDog @zarchasmpgmr @Rairii in a better world we'd regulate these self-dealing relationships out of existence, you can't be the one the board of more than one company, you can't be an executive and on the board of any company, you can't be on the board and an employee of a direct subsidiary or supplier, etc.

Make Finance Boring Again; regulate all the shenanigans and crazy deals out of existence until the only way that anyone makes money is by _doing_ _something_ _useful_ for the public.

@raven667 @shironeko @gsuberland @GossiTheDog @zarchasmpgmr @Rairii

Jeff Grigg May 21

We've let them convince us that corporations exist to serve their shareholders. And to reward top executives.

No, they exist to
1. Provide goods and services to customers.
2. Provide employment and fair living compensation to employees (including "executives")
3. Be socially responsible -- paying for infrastructure they use, and not causing harm.
4. Provide reasonable compensation to their investors and lenders (banks)

@raven667 @shironeko @gsuberland @GossiTheDog @zarchasmpgmr @Rairii

Jeff Grigg May 21

Also, I should not even have to say this, but ...

A corporation is not a person. No, they don't have the same freedom of religion, or personal rights.

Spending money to influence politics is not individual free speech.

"Public" forums should be reasonably unbiased, and based on facts and reality.

Not knowing exactly who your hateful speech harms, how, and when does not mean you're not shouting "Fire!" in a crowded theatre.

Ray—Golden Retriever Whisperer—🔝Insights May 22

@JeffGrigg @raven667 @shironeko @gsuberland @GossiTheDog @Rairii if a corporation is a person, then there should be capital punishment. Instant liquidation. Stocks zeroed out and worthless, causing portfolios to instantly drop.

@zarchasmpgmr @raven667 @shironeko @gsuberland @GossiTheDog @Rairii

Jeff Grigg May 23

Yes, and workers and bystanders dying because of the corporation's greed and carelessness is *Involuntary Manslaughter*, and should be dealt with as such -- including, if corporations are "persons," the dissolution of the same, and liquidation of all assets.

@shironeko @gsuberland @GossiTheDog @Rairii but so many of the directors are shareholders themselves, which brings in the management dilemma. Sure they want to do well, but sometimes they’re too close to see the bigger picture, plus they’re getting spoon fed information for the most part.

@Rairii @gsuberland @GossiTheDog

Jeff Grigg May 20

I was working at a very large well-known international company, and learned that they paid for professional pentests, yearly.

And *every single year*, the testers "won."

Like, regardless of the "targets" they were asked to get/penetrate/violate, they *always* succeeded, regardless of corporate security or barriers to access.

🙄

Graham Sutherland / Polynomial May 20

@JeffGrigg @Rairii @GossiTheDog yeah, I've been doing those exact assessments since 2013 and it's just kinda part of the fabric at this point. I'd estimate at least two thirds of orgs are like that for the majority of their projects, at the absolute minimum.

luckily these days I'm not in the trenches doing the 2-3 day minimally-scoped checkbox nonsense where nothing ever really improves beyond fixing the criticals. I got burned out on that a very long time ago.

Bee O'Problem

@GossiTheDog AI, like web 3.0, is going just great

Tim Lavoie May 25

@beeoproblem @GossiTheDog I have to wonder if @molly0xfff has an, "AI is going great" lineup in the works, or if that's more of an Ed @Zitron thing.

Luuk May 20

@GossiTheDog Surely they’re the exception and not the rule, right? …right?

Andrew Golding May 20

@GossiTheDog may the light of a giant burning pile of money guide us to the promised future.

wasabi brain May 20

@GossiTheDog can’t wait to hear the stories of how they probably had a small army of sales people desperately trying to sell anything

Alastair Temple May 20

@GossiTheDog doesn't say much for Microsoft's ability to do some basic due diligence or their judgement regarding AI... much to no ones surprise I am sure.

@smilingdemon @GossiTheDog based on their recent layoff selections, we can see their level of judgement.

Tim Lavoie May 25

@smilingdemon @GossiTheDog "We asked Copilot if it seemed OK, said it was all cool."

Alastair Temple May 25

@tim_lavoie @GossiTheDog given what Nadella says about his personal AI use...

Lorgo Numputz May 20

@GossiTheDog

"Builder.ai told the FT that its auditors have “evolved in alignment with our operational scale and revenue segmentation” as well as local regulations, and that “changes in auditors were based on appropriate business needs at the point in time”. "

Can anyone translate this?

Kawaoneechan May 20

@lorgonumputz Buzzword buzzword buzzword buzzword, we tried to find better auditors, buzzword.

Jeff Grigg May 20

@kawa @lorgonumputz

"Our auditors told us that all of this is illegal. So we fired them and got new auditors."

😈

(Actually, most commonly, the auditing firm quits. Then the customer has to go find another. It's not at all uncommon, really.)

Kawaoneechan May 20

@JeffGrigg Yeah, that does sound like it makes more sense.
I'll notice you didn't feel the need correct me on the vacuity of the first half 😈

@lorgonumputz @GossiTheDog “we got caught with our pants down and being serviced, we tried to put an air of legitimacy, it failed, our C-levels now own private islands in the Caribbean.”

Fish Id Wardrobe May 21

@lorgonumputz @GossiTheDog no, and this is entirely as intended

me_valentijn May 24

@lorgonumputz @GossiTheDog
"We are very confident that we have a fiduciary duty to commit fraud, if that's what makes the most money for our shareholders. It's all totally legit as long as we pay some rando to sign off on it." 🤡

RootWyrm 🇺🇦

@GossiTheDog and yet everyone says I'm full of shit when I tell them that virtually all startups and "disruptors" are built on a foundation of accounting fraud or theft.

Dethe Elza May 24

@rootwyrm @GossiTheDog Not all, I knew one that was at least in part supported by human trafficking.

Mike Fraser

@GossiTheDog I'm going to to tell Canadian Revenue Agency that they're failing "to evolve with my operational scale and the segmentation of my revenue environment"
I'm sure they'll totally understand.